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State approves Kasilof PA for Marathon PA boundaries match newly shrunken Kasilof Unit; seasonal production at the gas field currently yields around 1 bcf each year Eric Lidji Petroleum News
The state on April 21 approved a request from the Marathon Oil Co. to create a Kasilof Participating Area in the coastal waters of southern Cook Inlet.
The approval completes a process from earlier in the year, when the state approved Marathon’s request to significantly shrink the size of the offshore Kasilof Unit, located six miles north of Clam Gulch. However, state officials at the time delayed making a decision on creating a Kasilof PA matching the new boundaries of the shrunken unit.
Both the shrunken unit and new participating area cover around 380 acres over two state leases — ADL 384534 and ADL 384529.
A participating area in Alaska creates an outline on the surface to represent the boundaries of productive reservoirs underground.
According to state regulations, a participating area can only include land “reasonably known” to contain oil or gas in paying quantities, something Marathon proved to the state through structure maps, well logs, seismic data and well test results.
Marathon is the operator and sole working interest owner of the Kasilof Unit and PA.
Kasilof production small, but promising Exploration in the area now called Kasilof began in the early 1960s and continued with varying levels of success into the mid-1970s. Marathon returned to the area in recent years, bringing decades of new technology to bear on the reservoir.
The state formed the Kasilof Unit in 2002, and Marathon began production in November 2006. That year, the company also built production facilities and a connection to the Kenai-Kachemak Pipeline to support the Unit.
Marathon sells the gas from Kasilof to in-state markets.
Historically, the Kasilof Unit has been one of the least productive in Cook Inlet, with somewhere in the vicinity of 2 billion cubic feet of natural gas since production began.
Although Marathon has drilled several exploration and development wells in the area since forming the Unit, the current production comes entirely from the seasonal operation of one well, KS-01RD, which Marathon temporarily shuts-in every summer.
While it will most likely never rival the giant fields of Cook Inlet like Swanson River, Beluga River or North Cook Inlet, the Kasilof Unit could become a stable source of natural gas supplies; the state in 2007 estimated reserves at the Unit to be 23.3 bcf.
The current plan of development expires at the end of the year. Marathon is required to file a second plan of development by Oct. 3, 2008. l
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